Transaction Processing Rules

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Transaction Processing

Rules

21 January 2016

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Notices

Proprietary Rights

The information contained in this document is proprietary and confidential to MasterCard International Incorporated, one or more of its affiliated entities (collectively “MasterCard”), or both.

This material may not be duplicated, published, or disclosed, in whole or in part, without the prior written permission of MasterCard.

Trademarks

Trademark notices and symbols used in this document reflect the registration status of MasterCard trademarks in the United States. Please consult with the Global Customer Service team or the MasterCard Law Department for the registration status of particular product, program, or service names outside the United States.

All third-party product and service names are trademarks or registered trademarks of their respective owners.

Disclaimer

MasterCard makes no representations or warranties of any kind, express or implied, with respect to the contents of this document. Without limitation, MasterCard specifically disclaims all representations and warranties with respect to this document and any intellectual property rights subsisting therein or any part thereof, including but not limited to any and all implied warranties of title, non-infringement, or suitability for any purpose (whether or not MasterCard has been advised, has reason to know, or is otherwise in fact aware of any information) or achievement of any particular result. Without limitation, MasterCard

specifically disclaims all representations and warranties that any practice or implementation of this document will not infringe any third party patents, copyrights, trade secrets or other rights.

Translation

A translation of any MasterCard manual, bulletin, release, or other MasterCard document into a language other than English is intended solely as a convenience to MasterCard customers. MasterCard provides any translated document to its customers “AS IS” and makes no representations or warranties of any kind with respect to the translated document, including, but not limited to, its accuracy or reliability. In no event shall MasterCard be liable for any damages resulting from reliance on any translated document. The English version of any MasterCard document will take precedence over any translated version in any legal proceeding.

Information Available Online

MasterCard provides details about the standards used for this document—including times expressed, language use, and contact information—on the Publications Support page available on MasterCard Connect™_{. Go to Publications}_Support_{for centralized information.}

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Applicability of Rules in this Manual

This manual contains Rules for the MasterCard, Maestro and Cirrus brands. The Rules relate to Activity conducted pursuant to a License that MasterCard grants to a Customer for use of one or more of these brands. If a particular brand or brands is not mentioned in a Rule, then the Rule applies to all three brands.

The Rules in this manual pertain to the processing of Transactions. As used herein, a Transaction means a transaction resulting from the use of a MasterCard, Maestro, or Cirrus Card, as the case may be.

The below table describes the applicability of the Rules for particular types of Transactions. Please note that the term “POS Transaction” refers to a Transaction that occurs at a Merchant location, whether in a Card-present environment at an attended or unattended POS Terminal, or in a Card-not-present environment. In a Card-not-present environment, this may include electronic commerce (“e-commerce”), mail order, phone order, or recurring payment Transactions.

Rules relating to… Apply to…

MasterCard POS Transactions A POS Transaction conducted with a MasterCard Card. Maestro POS Transactions A POS Transaction conducted with:

• A Maestro Card, or

• A MasterCard Card issued using a BIN identified by the Corporation as “Debit MasterCard” and routed to the MasterCard®_{Single Message System.}

ATM Transactions A Transaction conducted with a MasterCard, Maestro, or Cirrus Card at an ATM Terminal and routed to the Interchange System. Manual Cash Disbursement

Transactions

A cash withdrawal Transaction conducted at a Customer financial institution teller with:

• A MasterCard Card, or

• A Maestro or Cirrus Card at a PIN-based In-Branch Terminal and routed to the Interchange System.

MasterCard Electronic Transactions

A POS Transaction conducted with a MasterCard Electronic Card at a MasterCard Electronic Merchant.

MasterCard Mobile Remote Payment (MMRP) Transactions

A POS Transaction performed by an enrolled consumer using a mobile device registered by the Issuer or its Service Manager and having MasterCard Mobile Remote Payment functionality. The consumer, as a MasterCard or Maestro Cardholder, initiates and authenticates payments by entering a PIN or mobile-specific credentials on the mobile device.

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Rules relating to… Apply to…

Payment Transactions A Transaction that transfers funds to an Account. A Payment Transaction is not a credit that reverses a previous purchase. Includes MoneySend Payment Transactions.

Modifying Words and Acronyms

From time to time, the meanings of the above terms are modified by the addition of another word or acronym. For example, a Debit MasterCard POS Transaction means a Transaction resulting from the use of a Debit MasterCard Card at the point of sale (POS). However, for ease of use, not every modifying term is defined. While MasterCard alone interprets and enforces its Rules and other Standards, these Transaction Processing Rules endeavor to use defined terms and other terms and terminology in a plain manner that will be generally understood in the payments industry.

Variations and Additions to the Rules for a Geographic Area

Variations and/or additions (“modifications”) to the Rules are applicable in geographic areas, whether a country, a number of countries, a region, or other area. In the event of a conflict between a Rule and a variation of that Rule, the modification is afforded precedence and is applicable. The Rules set forth in this manual are Standards and MasterCard has the sole right to interpret and enforce the Rules and other Standards.

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Summary of Changes, 21 January 2016

The below table reflects changes included in this update of the Transaction Processing Rules manual. For more information about changes to the Rules, see the MasterCard Rules Report in the “Rules and Policies” section of Publications on MasterCard Connect™_.

Chapter

Number Rule Name Source or Explanation of Revisions

2 _{Europe Region}

2.2.2 Stand-In Processing Service

Corrected numbering from 2.2.1 to 2.2.2

3 _{Europe Region}

3.10 Returned Products and Canceled Services

3.10.1 Refund Transactions

See “Clarification—Standards for Refunds and Chargeback Reason Code 4860 (Credit Not Processed),” Europe Region Operations Bulletin No. 9, 1 September 2015.

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Summary of Changes, 15 December 2015

The below table reflects changes included in this update of the Transaction Processing Rules manual. For more information about changes to the Rules, see the MasterCard Rules Report in the “Rules and Policies” section of Publications on MasterCard Connect™_.

Chapter

Throughout Throughout Rule numbers have been added to the third level (e.g., 1.1.1).

1 Acquirer Host System Requirements This Rule has been moved to chapter 2; see Rule 2.1.1.

2 2.2.1 Issuer Host System Requirements Formerly the first paragraph of “Issuer Authorization Requirements.” Clarified that authorization host support for refund Transactions is required for single message processing only.

2 2.2.2 Stand-In Processing Service Text has been reorganized, and clarified with respect to the use of blocking services. 2 2.5.1 Preauthorizations—MasterCard

POS Transactions

Incorrect reference to Europe Region variation removed.

2 2.5.2 Preauthorizations—Maestro POS Transactions

Reference to existing Europe Region variation added.

2 _{2.14 Balance Inquiries} Asia/Pacific Region 2.14 Balance Inquiries

Regional variation was misplaced; moved from 2.2. Issuer Authorization Requirements.

2 _{Europe Region} 2.17 Euro Conversion

See “Changes to Global Floor Limit

Terminology,” Global Security Bulletin No. 9, 15 September 2015.

3 _{3.1.1 Cardholder Must Present a Card} 3.2 MasterCard Manual Cash

Disbursement Acceptance Procedures

See “Revised Standards for Merchant Acceptance Procedures,” Global Security

Bulletin No. 7, 15 July 2015.

3 _{3.1 Merchant Acceptance Procedures} 3.1.2 Obtaining an Authorization for a MasterCard POS Transaction

Clarified acceptance procedure at non-chip-enabled POS Terminals; also see “Changes to Global Floor Limit Terminology,” Global

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Chapter

3 3.1.4 Obtaining an Authorization for a Maestro POS Transaction

3 3.1.6 Use of a Consumer Device CVM See “Revised Standards for Consumer Device Cardholder Verification Methods,” Global

Security Bulletin No. 8, 17 August 2015.

3 3.4 POI Currency Conversion See “Revised Standards for POI Currency Conversion—Consolidation and

Simplification,” Global Operations Bulletin No. 5, 1 May 2015

3 3.9.1 POS and MasterCard Manual Cash Disbursement Transaction Receipt Requirements

Title change; clarifications; text on prohibited information moved to Rule 3.9.4. Requirement to provide street address removed (in

alignment with Security Rules and Procedures section 3.11.2). Also see “Revised Standards for Merchant Acceptance Procedures,” Global

Security Bulletin No. 7, 15 July 2015.

3 3.9.2 ATM and PIN-based In-Branch Terminal Transaction Receipt Requirements

Clarifications.

3 3.9.4 Prohibited Information Text moved from Rule 3.9. 3 _{3.11 Transaction Records}

3.11.1 Retention of Transaction Records

Updated numbering of cross-referenced rules; subsection heading on record retention added. 3 _{Asia/Pacific Region}

3.10 Returned Products and Canceled Services

3.10.1 Refund Transactions

See “Revised Standards Relating to Surcharge Refunds in Australia,” Australia Operations

Bulletin No. 1, 1 September 2015.

3 _{Europe Region}

3.9.1 POS and MasterCard Manual Cash Disbursement Transaction Receipt Requirement

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Chapter

4 Contactless EMV Mode Transaction Offline Authorization Limit Amounts

Terminology,” Global Security Bulletin No. 9, 15 September 2015. This section has been moved to chapter 5 of the Quick Reference Booklet.

4 _{Asia/Pacific Region}

4.9 Purchase with Cash Back Transactions

Insertion of India Rule inadvertently placed in the Middle East/Africa Region section; minor rewording. (India is located in the Asia/Pacific Region.)

4 _{Canada Region}

Minor rewording.

4 _{Middle East/Africa Region} 4.9 Purchase with Cash Back Transactions

Removal of India Rule inadvertently placed in the Middle East/Africa Region section. (India is located in the Asia/Pacific Region.) Minor rewording of South Africa Rule.

4 _{Europe Region}

4.5.2 Maestro Contactless Transit Aggregated Transactions

Clarification of applicable message type for authorization reversals and advices in the Europe Region

4 _{Europe Region}

Minor rewording; incorporation of Debit MasterCard into issuer support mandate per “Revised Standards for Issuer Support for Purchase with Cash Back and for MARP,”

Europe Region Operations Bulletin No. 3, 1

March 2012. 4 _{Latin America and the Caribbean Region}

See “Revised Standards for the Introduction of Purchase with Cash Back Transactions in Brazil,” Brazil Operations Bulletin No. 10, 28 October 2015.

4 _{Middle East/Africa Region} 4.9 Purchase with Cash Back Transactions

Removal of India Rule inadvertently placed in the Middle East/Africa Region section. (India is located in the Asia/Pacific Region.)

4 _{United States Region}

4.14 MasterCard Manual Cash Disbursement Transactions

Moved U.S. Region variation from Rule 4.14.1, Non-discrimination Regarding Cash

Disbursement Services, to Rule 4.14; no change to text.

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Chapter

4 _{United States Region} 4.19 Shared Deposits

4.19.5 ATM Terminal Clearing and Deposit Processing

Consolidation of “ATM Terminal Clearing” and “Deposit Processing” into one Rule; deletion of obsolete reference to the Chargeback Guide.

5 _{5.1 Electronic Commerce Transactions} 5.1.1 E-commerce Transactions— Acquirer and Merchant Requirements

Clarification regarding multiple shipments.

5 5.4 Installment Billing for Domestic Transactions—Participating Countries Only

Addition of text formerly located in sections 1.23, 1.23.1, and 1.23.2 of the Chargeback

Guide.

6 6.3 MoneySend Payment Transactions See “Revised Standards for MoneySend Payment Transaction Support for Small Business Commercial Card Issuers,” Global

Operations Bulletin No. 10, 1 October 2015.

7 _{Europe Region}

7.3.1 Contactless Reader Requirements

See “New Standards for Migration to MasterCard Contactless Reader Specification Version 3.0, Czech Republic Operations Bulletin No. 5, 28 September 2015; New Standards for Migration to MasterCard Contactless Reader Specification Version 3.0, Slovakia Operations

Bulletin No. 4, 28 September 2015; “New

Standards for Migration to MasterCard

Contactless Reader Specification Version 3.0 or Above,” Europe Region Operations Bulletin No. 9, 1 September 2015. Text has also been reformatted; erroneous duplication of text has been removed.

7 _{Europe Region}

7.4.1 Contactless-enabled POS Terminals

See “Revised Standards for CVM at

Contactless POS Terminals,” Europe Region

Subheadings have been added; the order of text has been moved accordingly.

7 7.7 Hybrid Terminal Requirements See “Announcement of Revised Standards— EMV Security Roadmap,” Global Operations

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Chapter

7.7 Hybrid Terminal Requirements

See “Revised Standards for Chip and Terminal Requirements in the U.S. Region,” U.S. Region

Operations Bulletin No. 7, 31 August 2015.

7.7 Hybrid Terminal Requirements

Appendix A Latin America and the Caribbean Region Added Cuba to the Latin America and the Caribbean Region geographic region list. Appendix C MasterCard Mobile Remote Payment

Transactions

Added MasterCard Mobile Remote Payment Transaction requirements

Appendix D CAT Transactions Removed redundant text that also appears in Rule 4.10, Transactions at Unattended POS Terminals.

Appendix D CAT Level Requirements For CAT 2 and CAT 3, clarified that the same maximum amount applies to contact and contactless transactions when both are supported. Also see “Revised Standards for Cardholder-Activated Terminal 3 Devices,”

Global Operations Bulletin No. 10, 1 October

2014; “Revised Standards for Cardholder-Activated Terminal 3 Devices in the Europe Region,” Global Operations Bulletin No. 2, 2 February 2015; and “Changes to Global Floor Limit Terminology,” Global Security Bulletin No. 9, 15 September 2015 and “Revised Standards for Contactless and Quick Payment Service Transactions in the United Kingdom,” Global

Operations Bulletin No. 8, 1 August 2014.

Appendix D _{CAT Level 1: Automated Dispensing} Machines (CAT 1)

CAT Level 2: Self-Service Terminals (CAT 2)

CAT Level 4: In-Flight Commerce (IFC) Terminals (CAT 4)

CAT Level 7: Transponder Transactions (CAT 7)

Appendix E New appendix Duplication of Chargeback Guide “Appendix C, CVM Limit Amounts.”

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Chapter

Appendix F _{Model Screens Offering POI Currency} Conversion

Model Receipt for Withdrawal Completed with POI Currency Conversion

See “Revised Standards for POI Currency Conversion—Consolidation and

Simplification,” Global Operations Bulletin No. 5, 1 May 2015.

Appendix F Model Screens Offering POI Currency Conversion

See Revised Standards for POI Currency Conversion,” Global Operations Bulletin No. 10, 1 October 2015.

Appendix H _{MasterCard Token Vault} See “Revised Standards for Tokenization and the MasterCard Digital Enablement Service,”

Global Operations Bulletin No. 8, 1 August

2014. Appendix H _{Cross-border Transaction}

Interregional Transaction Intracountry Transaction Intraregional Transaction MasterCard Europe Transaction Clarification of terms.

Appendix H _{Cardholder Verification Method (CVM)} Consumer Device Cardholder Verification Method, Consumer Device CVM,

CDCVM

On-Device Cardholder Verification Payment Application

See “Revised Standards for Consumer Device Cardholder Verification Methods,” Global

Security Bulletin No. 8, 17 August 2015.

Appendix H _{Account Enablement System} Transaction Management System Trusted Service Manager

“Digital Activity Service Provider Registration Details and Revised Standards,” Global

Appendix H MasterCard Europe Changed “MasterCard Europe sprl” to “MasterCard Europe SA” to reflect a legal entity conversion that took effect 1 July 2015.

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Notices

...2

Applicability of Rules in this Manual

...3

Summary of Changes, 21 January 2016

... 5

Summary of Changes, 15 December 2015

...6

Chapter 1: Connecting to the Interchange System and

Authorization Routing

... 22

1.1 Connecting to the Interchange System...24

1.2 Authorization Routing—MasterCard POS Transactions... 24

1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch Terminal Transactions... 24

1.3.1 Routing Instructions and System Maintenance... 25

1.3.2 Chip Transaction Routing...25

1.3.3 Domestic Transaction Routing...25

1.4 ATM Terminal Connection to the Interchange System... 26

1.5 Gateway Processing... 26

1.6 POS Terminal Connection to the Interchange System...26

Variations and Additions by Region... 27

Asia/Pacific Region... 27

1.6 POS Terminal Connection to the Interchange System... 27

Canada Region... 27

1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch Terminal Transactions...27

Europe Region... 28

1.4 ATM Terminal Connection to the Interchange System—SEPA Only... 28

Latin America and the Caribbean Region...28

1.6 POS Terminal Connection to the Interchange System... 29

United States Region...29

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1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch

Terminal Transactions...29

Additional U.S. Region and U.S. Territory Rules...30

Chapter 2: Authorization and Clearing Requirements

... 32

2.1 Acquirer Authorization Requirements... 35

2.1.1 Acquirer Host System Requirements—U.S. Region Only... 35

2.2 Issuer Authorization Requirements... 36

2.2.1 Issuer Host System Requirements...36

2.2.2 Stand-In Processing Service...36

2.2.3 ATM Transaction Requirements for MasterCard Credit Card Issuers...37

2.3 Authorization Responses... 38

2.4 Performance Standards... 38

2.4.1 Performance Standards—Acquirer Requirements... 39

2.4.2 Performance Standards—Issuer Requirements...39

2.5 Preauthorizations... 40

2.5.1 Preauthorizations—MasterCard POS Transactions... 40

2.5.2 Preauthorizations—Maestro POS Transactions...41

2.5.3 Preauthorizations—ATM and Manual Cash Disbursement Transactions... 41

2.6 Undefined Authorizations... 41

2.7 Final Authorizations... 42

2.8 Message Reason Code 4808 Chargeback Protection Period...42

2.9 Multiple Authorizations...43

2.10 Multiple Clearing Messages...44

2.11 Full and Partial Reversals...45

2.11.1 Reversal for Conversion of Approval to Decline... 46

2.11.2 Reversal to Cancel Transaction... 46

2.12 Full and Partial Approvals and Account Balance Responses... 47

2.13 Corrections... 48

2.14 Balance Inquiries... 48

2.15 CVC 2 Verification for POS Transactions... 49

2.16 CVC 3 Verification for Maestro Contactless Magnetic Stripe Transactions—Brazil Only...49

2.17 Euro Conversion—Europe Region Only...49

2.18 Transaction Queries and Disputes... 49

2.19 Chargebacks for Reissued Cards...49

2.20 Correction of Errors...50

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2.2 Issuer Authorization Requirements...50

2.5 Preauthorizations...50

Canada Region... 50

2.12 Full and Partial Approvals and Account Balance Responses...51

Europe Region... 53

2.4 Performance Standards...53

2.7 Final Authorizations...55

2.8 Message Reason Code 4808 Chargeback Protection Period... 55

2.9 Multiple Authorizations... 56

2.11 Full and Partial Reversals... 56

2.14 Balance Inquiries...58

2.15 CVC 2 Verification for POS Transactions...58

2.17 Euro Conversion... 59

2.16 CVC 3 Verification for Maestro Contactless Magnetic Stripe Transactions— Brazil Only... 59

2.4 Performance Standards...62

2.11 Full and Partial Reversals... 63

2.14 Balance Inquiries...66

Chapter 3: Acceptance Procedures

...67

3.1 Merchant Acceptance Procedures...69

3.1.1 Cardholder Must Present a Card... 69

3.1.2 Obtaining an Authorization for a MasterCard POS Transaction...71

3.1.3 MasterCard Cardholder Verification Requirements... 75

3.1.4 Obtaining an Authorization for a Maestro POS Transaction... 77

3.1.5 Maestro Cardholder Verification Requirements... 77

3.1.6 Use of a Consumer Device CVM... 78

3.2 MasterCard Manual Cash Disbursement Acceptance Procedures... 78

3.3 ATM Terminal and PIN-based In-Branch Terminal Transactions...79

3.4 POI Currency Conversion...79

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3.4.2 Cardholder Disclosure—Unattended POS Terminal... 80

3.4.3 Cardholder Disclosure—ATM Terminal... 80

3.4.4 Cardholder Disclosure—Transaction Receipt Information...81

3.4.5 Transaction Processing Requirements... 81

3.5 Multiple Transactions—MasterCard POS Transactions Only... 82

3.6 Partial Payment—MasterCard POS Transactions Only...82

3.7 Specific Terms of a Transaction... 82

3.8 Charges for Loss, Theft, or Damage—MasterCard POS Transactions Only... 83

3.9 Providing a Transaction Receipt... 83

3.9.1 POS and MasterCard Manual Cash Disbursement Transaction Receipt Requirements... 84

3.9.2 ATM and PIN-based In-Branch Terminal Transaction Receipt Requirements... 85

3.9.3 Primary Account Number (PAN) Truncation and Expiration Date Omission... 86

3.9.4 Prohibited Information...86

3.10 Returned Products and Canceled Services...86

3.10.1 Refund Transactions...87

3.11 Transaction Records...88

3.11.1 Retention of Transaction Records... 88

3.1 Merchant Acceptance Procedures... 89

3.10 Returned Products and Canceled Services... 89

Canada Region... 89

3.9 Providing a Transaction Receipt...89

Europe Region... 90

3.9 Providing a Transaction Receipt...90

Additional U.S. Region and U.S. Territory Rules...93

Chapter 4: Card-Present Transactions

...94

4.1 Chip Transactions at Hybrid Terminals...97

4.2 Offline Transactions Performed on Board Planes, Trains, and Ships...97

4.3 No-CVM Magnetic Stripe and Contact Chip Maestro POS Transactions—Europe Region Only... 98

4.4 Contactless Transactions at POS Terminals... 98

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4.5.1 MasterCard Contactless Transit Aggregated Transactions... 99

4.5.2 Maestro Contactless Transit Aggregated Transactions... 99

4.6 Contactless Transactions at ATM Terminals... 100

4.7 Contactless-only Acceptance...100

4.8 Quick Payment Service (QPS) Program—MasterCard POS Transactions Only...102

4.9 Purchase with Cash Back Transactions... 102

4.10 Transactions at Unattended POS Terminals...103

4.10.1 Automated Fuel Dispenser Transactions... 103

4.11 PIN-based Debit Transactions—United States Region Only... 104

4.12 PIN-less Single Message Transactions—United States Region Only... 104

4.13 Merchant-approved Maestro POS Transactions... 104

4.14 MasterCard Manual Cash Disbursement Transactions... 105

4.14.1 Non-discrimination Regarding Cash Disbursement Services... 105

4.14.2 Maximum Cash Disbursement Amounts... 105

4.14.3 Discount or Service Charges... 106

4.14.4 MasterCard Acceptance Mark Must Be Displayed... 106

4.15 Encashment of MasterCard Travelers Cheques...106

4.16 ATM Transactions... 106

4.16.1 “Chained” Transactions...106

4.16.2 ATM Transaction Branding... 107

4.17 ATM Access Fees...107

4.17.1 ATM Access Fees—Domestic Transactions...107

4.17.2 ATM Access Fees—Cross-border Transactions... 107

4.17.3 ATM Access Fee Requirements...107

4.18 Merchandise Transactions at ATM Terminals... 109

4.18.1 Approved Merchandise Categories... 110

4.18.2 Screen Display Requirement for Merchandise Categories... 111

4.19 Shared Deposits—United States Region Only...111

4.10 Transactions at Unattended POS Terminals... 111

4.17 ATM Access Fees... 112

Canada Region... 112

Europe Region... 114

4.3 No-CVM Magnetic Stripe and Contact Chip Maestro POS Transactions... 114

4.4 Contactless Transactions at POS Terminals...115

4.5 Contactless Transit Aggregated Transactions... 116

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4.13 Merchant-approved Maestro POS Transactions...118

4.18 Merchandise Transactions at ATM Terminals...119

4.4 Contactless Transactions at POS Terminals...119

4.5 Contactless Transit Aggregated Transactions... 120

Middle East/Africa Region... 121

4.1 Chip Transactions at Hybrid Terminals... 122

4.11 PIN-based Debit Transactions... 123

4.12 PIN-less Single Message Transactions... 123

4.18 Merchandise Transactions at ATM Terminals...124

4.19 Shared Deposits...124

Chapter 5: Card-Not-Present Transactions

... 128

5.1 Electronic Commerce Transactions...130

5.1.2 E-commerce Transactions—Issuer Requirements...130

5.1.3 Use of Static AAV for Card-not-present Transactions...131

5.2 Mail Order and Telephone Order (MO/TO) Transactions...131

5.3 Recurring Payment Transactions... 132

5.4 Installment Billing for Domestic Transactions—Participating Countries Only... 132

5.4.1 Applicability of Rules... 133

5.4.2 Definitions...133

5.4.3 Transaction Processing Procedures... 134

5.5 Transit Transactions Performed for Debt Recovery...135

5.6 Use of Automatic Billing Updater... 135

5.1 Electronic Commerce Transactions... 135

5.2 Mail Order and Telephone Order (MO/TO) Transactions... 136

5.2 Use of Automatic Billing Updater...137

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5.2 Mail Order and Telephone Order (MO/TO) Maestro Transactions... 138

5.3 Recurring Payment Transactions...140

5.4 Installment Billing for Domestic Transactions—Participating Countries Only...141

5.6 Use of Automatic Billing Updater...147

Chapter 6: Payment Transactions and MoneySend Payment

Transactions

...149

6.1 Payment Transactions... 150

6.1.1 Payment Transactions—Acquirer and Merchant Requirements... 150

6.1.2 Payment Transactions—Issuer Requirements... 151

6.2 Gaming Payment Transactions—Europe Region Only...151

6.3 MoneySend Payment Transactions...152

6.1 Payment Transactions... 152

6.2 Gaming Payment Transactions... 153

Chapter 7: Terminal Requirements

...155

7.1 Terminal Eligibility...157

7.2 Terminal Requirements... 157

7.2.1 Terminal Function Keys... 158

7.2.2 Terminal Responses...158

7.2.3 Terminal Transaction Log...158

7.3 Contactless Payment Functionality...159

7.3.1 Contactless Reader Requirements... 159

7.3.2 Proximity Coupling Device Requirements... 160

7.4 POS Terminal Requirements...160

7.4.1 Contactless–enabled POS Terminals... 160

7.4.2 Contactless-only POS Terminals...162

7.4.3 Mobile POS (MPOS) Terminals...162

7.4.4 Signature-based Maestro POS Terminals...163

7.5 Contactless-only Acceptance...163

7.6 ATM Terminal and PIN-based In-Branch Terminal Requirements...165

7.6.1 ATM Terminals...166

7.6.2 PIN-based In-Branch Terminals... 166

7.6.3 Contactless Payment Functionality... 166

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7.7.1 Hybrid POS Terminal Requirements... 167

7.7.2 Hybrid ATM Terminal and PIN-based In-Branch Terminal Requirements... 168

7.6 ATM Terminal and PIN-based In-Branch Terminal Requirements... 169

7.7 Hybrid Terminal Requirements...169

7.4 POS Terminal Requirements... 170

7.3 Contactless Payment Functionality... 170

7.3 Contactless Payment Functionality... 177

Appendix A: Geographic Regions

... 179

Single European Payments Area (SEPA)... 182

Appendix B: Compliance Zones

... 185

Compliance Zones...186

Appendix C: Transaction Identification Requirements

... 191

Transaction Date... 192

Contactless Transactions...192

Contactless Transit Aggregated Transactions... 194

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Quick Payment Service Transactions...198

Payment Transactions... 200

Electronic Commerce Transactions...201

Digital Secure Remote Payment Transactions... 202

Digital Secure Remote Payment Transactions Containing Chip Data... 202

Digital Secure Remote Payment Transactions Containing UCAF Data...204

Partial Shipments Following Digital Secure Remote Payment Transactions... 207

MasterCard Mobile Remote Payment Transactions...209

Appendix D: Cardholder-Activated Terminal (CAT) Transactions

...211

CAT Transactions...212

CAT Level Requirements... 213

Dual Capability for CAT 1 and CAT 2... 213

CAT Level 1: Automated Dispensing Machines (CAT 1)... 213

CAT Level 2: Self-Service Terminal (CAT 2)...214

CAT Level 3: Limited Amount Terminals (CAT 3)... 215

CAT Level 4: In-Flight Commerce (IFC) Terminals (CAT 4)...216

CAT Level 6: Electronic Commerce Transactions (CAT 6)...218

CAT Level 7: Transponder Transactions (CAT 7)... 218

CAT Level 9: Mobile POS (MPOS) Acceptance Device Transactions (CAT 9)... 219

Appendix E: CVM Limit Amounts

... 220

E.1 Overview...221

E.2 CVM Limit Amounts...221

Appendix F: Signage, Screen, and Receipt Text Display

... 222

Screen and Receipt Text Standards...224

Models for ATM Access Fee Notification at ATM Terminals...224

Models for Standard Signage Notification of an ATM Access Fee... 225

Asia/Pacific Region...225

Canada Region...226

Europe Region...226

Latin America and the Caribbean Region... 228

Middle East/Africa Region...229

United States Region... 230

Models for Generic Terminal Signage Notification of an ATM Access Fee... 230

Canada Region...232

Europe Region...232

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Models for Screen Display Notification of an ATM Access Fee... 236

Canada Region...238

Europe Region...238

Middle East/Africa Region...241

Model for an ATM Access Fee Transaction Receipt...243

Model Screens Offering POI Currency Conversion...243

Model Receipt for Withdrawal Completed with POI Currency Conversion...244

Appendix G: Best Practices

... 245

Digital Goods Purchases... 245

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Chapter 1 Connecting to the Interchange System and

Authorization Routing

The following Standards apply with regard to connecting to the Interchange System and

Authorization routing. Where applicable, modifications by region and/or country are provided at the end of this chapter in the section titled, “Variations and Additions by Region.”

1.1 Connecting to the Interchange System...24 1.2 Authorization Routing—MasterCard POS Transactions... 24 1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch Terminal

Transactions...24 1.3.1 Routing Instructions and System Maintenance...25 1.3.2 Chip Transaction Routing...25 1.3.3 Domestic Transaction Routing...25 1.4 ATM Terminal Connection to the Interchange System...26 1.5 Gateway Processing... 26 1.6 POS Terminal Connection to the Interchange System...26 Variations and Additions by Region... 27 Asia/Pacific Region... 27 1.4 ATM Terminal Connection to the Interchange System... 27 1.6 POS Terminal Connection to the Interchange System... 27 Canada Region... 27

1.3.3 Domestic Transaction Routing... 27 1.4 ATM Terminal Connection to the Interchange System... 28 Europe Region... 28

1.3.2 Chip Transaction Routing—SEPA only... 28 1.4 ATM Terminal Connection to the Interchange System—SEPA Only... 28 Latin America and the Caribbean Region... 28 1.4 ATM Terminal Connection to the Interchange System... 28 1.6 POS Terminal Connection to the Interchange System... 29 United States Region...29 1.1 Connecting to the Interchange System... 29 1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch Terminal Transactions... 29

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1.3.1 Routing Instructions and System Maintenance... 29 1.3.3 Domestic Transaction Routing... 30 1.4 ATM Terminal Connection to the Interchange System... 30 Additional U.S. Region and U.S. Territory Rules...30

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1.1 Connecting to the Interchange System

A Customer must maintain the necessary equipment and procedures to process Transactions and to connect to the Interchange System, using a telecommunications circuit established by the Interchange System that is equipped with back-up service. Before processing Transactions and on an ongoing basis thereafter, the Customer must perform testing and obtain any necessary certifications of its equipment, procedures, and Interchange System connections as may be required by the Corporation to ensure compatibility with its technical specifications then in effect.

Each Principal and Association must establish and maintain, at its own expense, a data processing facility that is capable of receiving, storing, processing, and communicating any Transaction sent to or received from the Interchange System, and may connect at least one data processing facility directly to the Interchange System. Such facility may be established and maintained by the Customer’s parent, its wholly-owned subsidiary, or an entity that is wholly owned, directly or indirectly, by the Customer’s parent, or with the prior written agreement of the Corporation, by the Customer’s designated third party agent.

NOTE: An addition to this Rule appears in the “United States Region” section at the end of this chapter.

1.2 Authorization Routing—MasterCard POS Transactions

On an ongoing basis, an Acquirer of MasterCard POS Transactions must recognize all active MasterCard bank identification numbers (BINs) for purposes of obtaining Transaction authorizations, and obtain such authorizations on behalf of each of its Merchants as the Standards require. If the Acquirer uses Account range files provided by the Corporation for this purpose, such files must be loaded and functioning on the Acquirer’s host system and available to its Merchants for use within six calendar days from the date that each updated file is distributed. Upon receipt of an updated Account range file from the Corporation, an

Acquirer must confirm via an acknowledgement file that it updated its host systems accordingly. Alternatively, the Acquirer may submit all authorization requests containing an Account number with a BIN in the 510000 to 559999 range to the Interchange System for routing to the Issuer.

1.3 Authorization Routing—Maestro POS, ATM Terminal, and

PIN-based In-Branch Terminal Transactions

An Acquirer of Maestro POS Transactions, ATM Transactions, and/or Manual Cash

Disbursement Transactions occurring at PIN-based In-Branch Terminals may default route to the Interchange System any such Transaction not belonging to its proprietary network. The Interchange System determines whether or not the Transaction is being performed by a Cardholder.

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An Acquirer that does not default route such Transactions to the Interchange System must recognize all active Account ranges that are included in the Corporation’s Financial Institution Table (FIT) or MasterCard Parameter Extract (MPE) files and must follow the Issuer’s routing instructions, if any, set forth in those files. The Acquirer must ensure that the files are loaded and functioning on its host systems and available to its Merchants, ATM Terminals, and PIN-based In-Branch Terminals for use within six calendar days from the date that each updated file is distributed. Upon receipt of an updated file, the Acquirer must confirm to the

Corporation via an acknowledgement file that it has updated its host systems accordingly.

NOTE: Modifications to this Rule appear in the “Additional U.S. Region and U.S. Territories” section at the end of this chapter.

1.3.1 Routing Instructions and System Maintenance

Each Customer or its Sponsor must:

1. Submit to the Corporation completed institution routing table (IRT) and institution

definition file (IDF) input documents no later than five business days prior to the requested effective date of live processing via the Interchange System.

2. Notify the Corporation of any routing updates at least five business days before the effective date of the change. Expedited maintenance may be performed within two business days of such notice.

3. Notify the Corporation of any scheduled downtime at least 24 hours in advance.

NOTE: A variation to this Rule appears in the “United States Region” section at the end of this chapter.

1.3.2 Chip Transaction Routing

Any chip-based ATM Transaction or Maestro POS Transaction generated by a MasterCard-branded Application Identifier (AID) must be routed through the Interchange System, or as otherwise approved by the Corporation.

NOTE: A variation to this Rule pertaining to SEPA appears in the “Europe Region” section at the end of this chapter.

1.3.3 Domestic Transaction Routing

When a Card is used at an ATM Terminal or PIN-based In-Branch Terminal in the country in which such Card was issued and the only common brand appearing on both the Card and the ATM Terminal or PIN-based In-Branch Terminal is a Mark, the resulting Transaction:

1. Must be routed to the Interchange System; or

2. The Issuer of the Card must report and pay a Brand Fee for such Transaction.

This provision does not apply with respect to a Transaction for which the Issuer and Acquirer is the same Customer (an “on-us” Transaction).

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NOTE: Variations to this Rule appear in the “Canada Region” and “United States Region” sections at the end of this chapter.

1.4 ATM Terminal Connection to the Interchange System

Except as otherwise provided in the Standards, each Customer that acquires any ATM

transactions must at all times make available for connection to the Interchange System, and in particular, the MasterCard®_{ATM Network, all of the eligible ATM Terminals established by that}

Customer (including its parents, subsidiaries, affiliates, and Sponsored entities) in the country in which the Customer is located and in every other country in which it has been Licensed to conduct ATM Transaction acquiring Activity.

A Customer Licensed only to conduct ATM Transaction acquiring Activity must make at least 75 percent of the ATM Terminals it establishes available for connection to the Interchange System.

NOTE: Modifications to this Rule appear in the “Asia/Pacific Region,” “Canada Region,” “Europe Region,” “Latin America and the Caribbean Region,” and “United States Region” sections at the end of this chapter.

1.5 Gateway Processing

The Interchange System may be used for the routing of ATM transactions and settlement of funds pursuant to terms governing a card that does not bear the any of the Corporation’s Marks if such card bears the mark of one of the following authorized Gateways:

1. PLUS System USA, Inc. 2. VISA USA, Inc.

The Interchange System technical specifications applicable to ATM Transactions apply to Gateway Processing. Error and dispute resolution is supported within Gateway Processing to the extent provided in the Standards that govern the individual Transaction. When a Gateway Customer uses the MasterCard®_{ATM Network for Gateway Processing, error and dispute}

resolution requests must be processed in accordance with the Chargeback Guide.

The Principal that submits an ATM transaction to the MasterCard®_{ATM Network for Gateway}

Processing is deemed to have consented to comply with all applicable Standards and to pay all applicable fees in connection with such transaction.

1.6 POS Terminal Connection to the Interchange System

NOTE: Rules on this subject appear in the “Asia/Pacific Region” and “Latin America and the Caribbean Region” sections at the end of this chapter.

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Variations and Additions by Region

The remainder of this chapter provides modifications to the Standards set out in this chapter. The modifications are organized by region or country and by applicable subject title.

Asia/Pacific Region

The following modifications to the Rules apply in the Asia/Pacific Region or in a particular Region country or countries. Refer to Appendix A for the Asia/Pacific Region geographic listing.

1.4 ATM Terminal Connection to the Interchange System

In the Asia/Pacific Region, the Rule on this subject is modified as follows.

A Customer that acquires ATM Transactions must make available for connection to the Interchange System at least 75 percent of its eligible ATM Terminals in the Region within one year of the approval of its application for a License.

1.6 POS Terminal Connection to the Interchange System

In the Asia/Pacific Region, a Customer that acquires POS Transactions must make available for connection to the Interchange System at least 75 percent of its eligible POS Terminals in the Region within one year of the approval of its application for a License.

Canada Region

The following modifications to the Rules apply in the Canada Region. Refer to Appendix A for the Canada Region geographic listing.

1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch

Terminal Transactions

1.3.3 Domestic Transaction Routing

In the Canada Region, the Rule on this subject is modified as follows.

When a Card issued in the Canada Region is used at an ATM Terminal or PIN-based In-Branch Terminal located in the Canada Region and the only common brand appearing on both the Card and ATM Terminal or PIN-based In-Branch Terminal is a Mark:

1. The resulting Transaction must be routed to the Interchange System; or

2. The Issuer receiving such Transaction must report and pay a Brand Fee for such Transaction.

This provision does not apply with respect to a Transaction for which the Issuer and Acquirer is the same Customer (an “on-us” Transaction) or any Transaction processed between:

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1. A Principal (or its Third Party Processor) and one of its Affiliates (or its Third Party Processor), or

2. Two Affiliates (or their Third Party Processors) Sponsored by the same Principal.

1.4 ATM Terminal Connection to the Interchange System

In the Canada Region, the Rule on this subject is modified as follows.

A Customer that acquires ATM Transactions must make available for connection to the Interchange System at least 75 percent of the eligible ATM Terminals established by it

(including its parents, subsidiaries and affiliates) in each major Canadian metropolitan area in which at least 10,000 of its debit Cardholders reside. The Census Metropolitan Area (CMA) as defined by the Canadian government will be used as the measure.

Europe Region

The following modifications to the Rules apply in the Europe Region or in a particular Region country or countries. Refer to Appendix A for the Europe Region and Single European Payments Area (SEPA) geographic listing.

1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch

Terminal Transactions

1.3.2 Chip Transaction Routing—SEPA only

The Rule on this subject does not apply to Intra-SEPA Transactions.

1.4 ATM Terminal Connection to the Interchange System—SEPA Only

Within SEPA, the Rule on this subject is modified as follows.

A Customer must at all times accept all MasterCard, Maestro, and Cirrus Cards at all ATM Terminals owned or established by that Customer (including its parents, subsidiaries, affiliates, and Sponsored entities) within SEPA if it accepts cards issued under other acceptance brands at those ATM Terminals.

Latin America and the Caribbean Region

The following modifications to the Rules apply in the Latin America and the Caribbean Region. Refer to Appendix A for the Latin America and the Caribbean Region geographic listing.

1.4 ATM Terminal Connection to the Interchange System

In the Latin America and the Caribbean Region, the Rule on this subject is modified as follows.

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A Customer that acquires ATM Transactions must make available for connection to the Interchange System at least 75 percent of its eligible ATM Terminals in the Region within one year of the approval of its application for a License.

1.6 POS Terminal Connection to the Interchange System

In the Latin America and the Caribbean Region, a Customer that acquires POS Transactions must make available for connection to the Interchange System at least 75 percent of its eligible POS Terminals in the Region within one year of the approval of its application for a License.

United States Region

The following modifications to the Rules apply in the United States (U.S.) Region. Refer to Appendix A for the U.S. Region geographic listing.

1.1 Connecting to the Interchange System

In the U.S. Region, the Rule on this subject is modified as follows.

Connection to the Interchange System for Maestro POS Transaction and ATM Transaction processing is limited to Principals or their Designees. As used herein, “Designee” means an entity authorized by the Corporation to connect to the Interchange System.

1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch

Terminal Transactions

1.3.1 Routing Instructions and System Maintenance

With respect to ATM Transaction processing, a Customer must provide the Corporation with written notification of downtime at least 48 hours before any regularly scheduled

maintenance event and within five business days following the occurrence of an emergency maintenance event. Written notification must include the date of the maintenance; the times at which the maintenance commences and concludes; a brief description of the reason for the maintenance; and for an emergency event, a description of the actions taken to prevent a reoccurrence of the event.

Scheduled Maintenance Emergency Maintenance

Permissible Maintenance Time frame

01:00 to 05:00 (New York time) Anytime Maximum Hours per Month 10 4

Maximum Hours per Week 5 2

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Scheduled Maintenance Emergency Maintenance

Maximum Hours per Day 2 1

Maximum Duration (in hours) of Event

2 1

1.3.3 Domestic Transaction Routing

When a Card issued in the United States Region is used at an ATM Terminal located in the United States Region for a Transaction other than the purchase of merchandise or a service, and a Mark is a common brand, but not the only common brand, appearing on both the Card and the ATM Terminal, the resulting Transaction must be routed to:

1. The interchange system specified by the Issuer; or

2. The Corporation’s Interchange System, if the Issuer has not specified to the Corporation a different interchange system for Transaction routing.

1.4 ATM Terminal Connection to the Interchange System

A Customer that acquires ATM Transactions must make available for connection to the Interchange System at least 75 percent of the eligible ATM Terminals established by it

(including its parents, subsidiaries and affiliates) in each major United States metropolitan area in which at least 10,000 of its debit Cardholders reside. The Metropolitan Statistical Area (M.S.A.) as defined by the United States government will be used as the measure.

Additional U.S. Region and U.S. Territory Rules

The following modifications to the Rules apply in the United States Region and in American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands (herein, “the U.S. Territories”).

These Rules apply in addition to any that apply within the Asia/Pacific Region, with respect to Customers located in American Samoa, Guam, and Northern Mariana Islands; the Latin America and the Caribbean Region, with respect to Customers located in Puerto Rico and the U.S. Virgin Islands; and the United States Region, with respect to U.S. Region Customers.

1.3 Authorization Routing—Maestro POS, ATM Terminal, and PIN-based In-Branch

Terminal Transactions

In the U.S. Region and U.S. Territories, the Rule on this subject is modified as follows.

The Corporation offers Merchants located in the U.S. Region and U.S. Territories the option of routing POS transactions initiated with a debit card enhanced with Maestro functionality to the MasterCard®_{Single Message System. The Acquirer of a Merchant located in the U.S.}

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Region or a U.S. Territory must support the Maestro routing indicator fields MS ATM (position 54) and MS POS (position 55) in the 80-byte Financial Institution Table (FIT) file. These fields apply only when the Maestro Flag (position 42 in the FIT file) is Y. When the Maestro Flag is

N, the Maestro routing indicator fields should be disregarded.

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Chapter 2 Authorization and Clearing Requirements

The following Standards apply with regard to authorization processing and clearing requirements. Where applicable, modifications by region and/or country are provided at the end of this chapter in the section titled, “Variations and Additions by Region.”

2.1 Acquirer Authorization Requirements...35 2.1.1 Acquirer Host System Requirements—U.S. Region Only... 35 2.2 Issuer Authorization Requirements... 36 2.2.1 Issuer Host System Requirements...36 2.2.2 Stand-In Processing Service...36 Accumulative Transaction Limits...37 Chip Cryptogram Validation in Stand-In... 37 2.2.3 ATM Transaction Requirements for MasterCard Credit Card Issuers...37 2.3 Authorization Responses...38 2.4 Performance Standards... 38 2.4.1 Performance Standards—Acquirer Requirements... 39 2.4.2 Performance Standards—Issuer Requirements... 39 Issuer Failure Rate (Substandard Level 1)... 39 Issuer Failure Rate (Substandard Level 2)... 39 Calculation of the Issuer Failure Rate...40 2.5 Preauthorizations... 40 2.5.1 Preauthorizations—MasterCard POS Transactions... 40 2.5.2 Preauthorizations—Maestro POS Transactions... 41 2.5.3 Preauthorizations—ATM and Manual Cash Disbursement Transactions... 41 2.6 Undefined Authorizations... 41 2.7 Final Authorizations... 42 2.8 Message Reason Code 4808 Chargeback Protection Period... 42 2.9 Multiple Authorizations...43 2.10 Multiple Clearing Messages... 44 2.11 Full and Partial Reversals... 45 2.11.1 Reversal for Conversion of Approval to Decline...46 2.11.2 Reversal to Cancel Transaction...46 2.12 Full and Partial Approvals and Account Balance Responses...47 2.13 Corrections... 48 2.14 Balance Inquiries... 48 2.15 CVC 2 Verification for POS Transactions... 49 2.16 CVC 3 Verification for Maestro Contactless Magnetic Stripe Transactions—Brazil Only... 49

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2.17 Euro Conversion—Europe Region Only...49 2.18 Transaction Queries and Disputes...49 2.19 Chargebacks for Reissued Cards... 49 2.20 Correction of Errors... 50 Variations and Additions by Region... 50 Asia/Pacific Region... 50 2.1 Acquirer Authorization Requirements... 50 2.2 Issuer Authorization Requirements... 50 2.2.1 Issuer Host System Requirements... 50 2.5 Preauthorizations... 50 2.5.2 Preauthorizations—Maestro POS Transactions...50 Canada Region... 50 2.12 Full and Partial Approvals and Account Balance Responses... 51 Europe Region... 53 2.1 Acquirer Authorization Requirements... 53 2.2 Issuer Authorization Requirements... 53 2.2.2 Stand-In Processing Service... 53 2.4 Performance Standards... 53 2.4.1 Performance Standards—Issuer Requirements...53 2.5 Preauthorizations... 54 2.5.2 Preauthorizations—Maestro POS Transactions...54 2.5.3 Preauthorizations—ATM and Manual Cash Disbursement Transactions... 54 2.7 Final Authorizations...55 2.8 Message Reason Code 4808 Chargeback Protection Period...55 2.9 Multiple Authorizations... 56 2.11 Full and Partial Reversals...56 2.12 Full and Partial Approvals and Account Balance Responses... 57 2.14 Balance Inquiries... 58 2.15 CVC 2 Verification for POS Transactions...58 2.17 Euro Conversion...59 Latin America and the Caribbean Region... 59 2.16 CVC 3 Verification for Maestro Contactless Magnetic Stripe Transactions—Brazil Only...59 United States Region...59 2.1 Acquirer Authorization Requirements... 59 2.1.1 Acquirer Host System Requirements...60 2.2 Issuer Authorization Requirements... 60 2.2.1 Issuer Host System Requirements... 60 2.2.2 Stand-In Processing Service... 60 2.4 Performance Standards... 62

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2.4.1 Performance Standards—Issuer Requirements...62 2.5 Preauthorizations... 62 2.5.2 Preauthorizations—Maestro POS Transactions...62 2.11 Full and Partial Reversals...63 2.12 Full and Partial Approvals and Account Balance Responses... 65 2.14 Balance Inquiries... 66

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2.1 Acquirer Authorization Requirements

An Acquirer and each of its Merchants must support POS Transactions (authorized online by the Issuer or offline by the chip), dual message refund Transactions (if dual message

processing is supported), and a full reversal when performed to cancel a POS Transactions that the Acquirer cannot complete due to a technical problem.

The Acquirer of a Merchant that accepts Maestro Cards must support Maestro POS

Transactions that either automatically access the primary account or allow the Cardholder to choose to access the checking account or savings account (“account selection”).

An Acquirer may also support, and its Merchants may optionally offer, the following

Transaction and message types. An Acquirer that supports and any of its Merchants that offer an optional Transaction or message type must comply with the Rules applicable to the

optional Transaction or message type that is supported or offered.

• Purchase with cash back Transactions (Debit MasterCard and Maestro only, unless otherwise specified for a country or Region)

• Merchant-approved Maestro POS Transactions

• Payment Transactions and MoneySend Payment Transactions

• Maestro POS Transaction preauthorization and completion (single message processing) • Partial approval

• Balance response (prepaid only)

• Full reversal, including cancellation, and partial reversal (Merchant-initiated at the POS Terminal)

• POS balance inquiry (Debit MasterCard and Maestro only)

• Refund Transactions and/or corrections (single message and offline chip processing) Refer to “Full and Partial Approvals and Account Balance Responses” for a requirement to support partial approval and balance response effective with Release 20.Q2.

If a Transaction that may be processed offline in accordance with the Terminal offline chip authorization limit cannot be processed offline for any reason, the Transaction must be processed online; if the Transaction cannot be processed online, then the Transaction must be declined. A MasterCard®_{Single Message System Acquirer may clear offline Chip Transaction}

by transmitting the required Transaction data in an online Financial Advice/0220 message or as part of a batch notification.

NOTE: Modifications to this Rule appear in the “Asia/Pacific Region,” “Europe Region,” and “United States Region” sections at the end of this chapter.

2.1.1 Acquirer Host System Requirements—U.S. Region Only

NOTE: A Rule on this subject appears in the “United States Region” section at the end of this chapter.

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2.2 Issuer Authorization Requirements

The Issuer of a debit Card Program or of a credit Card Program that provides cash access at ATM Terminals and PIN-based In-Branch Terminals:

1. Must support POS Transaction authorizations and preauthorizations from a debit Cardholder’s primary account, checking account, and savings account.

2. Must offer cash withdrawal and Merchandise Transactions from no account specified to debit Cardholders and cash advances to credit Cardholders.

3. May offer, at its option, balance inquiry to checking, savings, and credit card accounts; and transfers to and from checking and savings accounts.

4. Must support MoneySend Payment Transactions as set forth in Rule 6.3.

A Chip Card Issuer that elects to process offline Chip Transactions must support offline

purchase and refund Transactions. If an offline Transaction type is not offered to a Cardholder, the chip must send the Transaction online for authorization or decline the Transaction offline. An Issuer must accept a Chip Transaction cleared online by an Acquirer following an offline authorization.

In the event that an Issuer chooses not to offer a particular Transaction message type to its Cardholders, the Issuer must provide a value of 57 indicating “transaction not permitted to issuer/cardholder” in DE 39 (Response Code) of the online authorization message.

NOTE: Modifications to this Rule appear in the “United States Region” section at the end of this chapter.

2.2.1 Issuer Host System Requirements

An Issuer’s host system interfaces must support the online processing of: • POS Transactions

• Refund Transactions (for MasterCard®_{Single Message System processing only)}

• Partial approval requests • Balance response

• Reversal and correction requests

• POS balance inquiries (if required in a country or Region)

• Cash withdrawals and the purchase of Merchandise with no account specified at ATM Terminals and PIN-based In-Branch Terminals; and

• Payment Transactions

NOTE: Modifications to this Rule appear in the “Asia/Pacific Region” and “United States Region” sections at the end of this chapter.

2.2.2 Stand-In Processing Service

An Issuer is liable for all Transactions authorized (with or without PIN validation) using the Stand-In Processing Service, provided that the Interchange System correctly uses the Stand-In

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Parameters defined by the Corporation or the Issuer. The Issuer may establish Stand-In Processing Service PIN validation at its option.

For all of its MasterCard Card Programs, an Issuer must use the Stand-In Processing Service and the Stand-In Investigation Service (SIS). Stand-In Parameters for MasterCard (including Debit MasterCard) Card Programs must be set at or above the Corporation’s default limits. For all of its Maestro and Cirrus Card Programs, an Issuer must use the Stand-In Processing Service. This requirement does not apply if the Issuer commenced its use of an alternative on-behalf authorization service before 1 December 2003 and such service meets the

Corporation’s performance standards as set forth in Rule 2.4.2. Stand-In Parameters for Maestro and Cirrus Card Programs must be set at or above the Corporation’s default limits. In the event that fraudulent activity is detected with respect to a MasterCard BIN or BIN range, the Corporation, in its sole discretion and judgment, may take such action as the Corporation deems necessary or appropriate to safeguard the goodwill and reputation of the Corporation’s Marks. Such action may include, by way of example and not limitation, declining some or all Transaction authorization requests received by the Stand-in Processing Service relating to the use of Cards issued under such MasterCard BIN or BIN range.

An Issuer may employ a blocking service which declines all Transaction authorization requests during Stand-In processing for inactive BINs or in situations where Stand-In processing does not apply for regulatory reasons.

NOTE: Variations to this Rule appear in the “Europe Region” and “United States Region” sections at the end of this chapter.

Accumulative Transaction Limits

An Issuer at its option, may use daily Stand-In Processing Service Transaction limits

(“accumulative limits”) for a Card Program that are higher than the applicable default limits set by the Corporation. Refer to the Stand-In Processing Worksheet for Online Issuers (Form 041) for the minimum (default) daily accumulative Transaction processing limit applicable to a particular Card Program.

Chip Cryptogram Validation in Stand-In

An issuer must use Chip Cryptogram Validation in Stand-In Processing for all of its Chip Card Programs effective as of:

• 30 September 2015 for Issuer in the Latin America and the Caribbean Region; • 31 March 2016 for Issuers in the Canada Region;

• 31 July 2016 for Issuers in the Asia/Pacific and Middle East/Africa Regions; and • 1 December 2016 for Issuers in the Europe and United States Regions.

2.2.3 ATM Transaction Requirements for MasterCard Credit Card Issuers

A MasterCard credit Card Issuer must maintain a 70 percent minimum ATM Transaction approval rate and manage individual denial category rates in compliance with the following Standards.

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Category Maximum Denial Rate Reason Codes Invalid PIN 13% 55 Insufficient Funds 10% 51 Invalid Transactions 14% 57 Exceed Limit 9% 61 Restricted Card 4% 62

The Issuer determines the maximum cash withdrawal limits applicable to its Cardholders; however, the Issuer must permit its MasterCard credit Cardholders to withdraw at least the equivalent of USD 200 daily if the available credit exists, and there is no other reason to deny the transactions.

To accommodate ATM Access Fees and currency conversions, the Issuer must authorize Transactions up to the equivalent of USD 10 or 10 percent, whichever is greater, more than the daily Transaction amount limit communicated to the Cardholder.

2.3 Authorization Responses

An Acquirer must comply with the authorization response wait time requirements set forth in “Maximum Response Times” in Chapter 2 of the Single Message System Specifications and in “Minimum Authorization Response Wait Time” in Chapter 4 of the Authorization Manual, as applicable.

An Issuer must comply with the authorization response requirements set forth in “Maximum Response Times” in Chapter 2 of the Single Message System Specifications manual and in “Routing Timer Values” in Chapter 5 of the Authorization Manual, as applicable. If the Issuer’s response is not received within the required time frame, then the Transaction will time out and be forwarded via Stand-In Processing System or another alternate authorization provider as specified by the Issuer.

2.4 Performance Standards

An Issuer or Acquirer that fails to meet the Corporation’s authorization performance standards may be subject to the following noncompliance assessments.

Occurrence Penalty

First occurrence USD 15,000

Transaction Processing Rules